40546

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Acknowledgment
As this is the first time I have written this piece of academic writing, this paper
would not have been completed without the assistance of several people. I would
like to take this opportunity to acknowledge their contribution.
My most heartfelt thanks must go to Prof. Dr. Dang Van Thanh who supervised me
in writing this thesis.
I wish to express my special thanks to Mr. Huyen Chief accountant and all other–
members in the accounting department of Huong Giang construction company for
providing me information, material that makes up this thesis.
My sincere thanks go to all the teachers at Accounting and Finance at Phuong
Dong University for their encouragement and reviewing the thesis.
Finally, I am also deeply grateful to my family and friends for their support and
suggestions.
Ha noi, 2003
Dang Thi Lan Anh
dang thi lan anh accounting and auditing
1
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Introduction
Capital construction is one of the national economy s material production branch,’
that takes an important position in building infrastructure process for our country to
come toward socialism. So each business must find out a management method
that suits its characters of production and makes the highest economic
effectiveness as well.
In market economy, almost the business trade for the profit goals. For
management of company, production costs and unit cost are important economical
indices because they reflect level quality of production operation. They effect
directly to the whole business operation and take the major to enterprise s’
existence and development. Therefore, the managers always try to find out the
solution to reduce production and unit cost to the minimum. Only by aggregating

production cost and evaluating unit cost adequate, exact that help the managers
analyze the operation results. Finally, they make suitable decisions on
management in order to enhance the production and management mechanism
organization.
Realizing the importance of operation production cost and unit cost in general,
specially in Huong Giang construction company where I did my graduation
training, I have come to decision to make the scope of this thesis:
“Aggregating production cost and evaluating unit cost in Huong Giang
construction company”.
The thesis includes three main chapters as follows:
Chapter one: General theory of aggregating production cost and evaluating unit
cost in construction companies.
Chapter two: Huong Giang company s accounting practices on aggregating‘
production cost and evaluating product of construction unit cost.
Chapter three: Solutions to perfect the quality of operation production cost and
unit cost accounting in Huong Giang company.
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Chapter one
General theories of aggregating production costs
and evaluating unit cost in construction companies.
In this chapter, theory on accounting for aggregating production costs and
evaluating unit cost will be discussed. It includes major issues as follows:
• Concept of production costs and unit cost, classification and relationship
between production costs and unit cost.
•The tenor of aggregating production costs.
•Estimation of work in progress.
•Method of evaluating unit cost.
1. Production cost and classification of production costs in

construction company:
1.1. Definition:
Production costs represent the moneytary value of resourses used such as labour
materials, overhead incurred in production process that form the product of
construction unit cost in a given period of time.
1.2. Classification:
Production costs can be classified in many ways depending on goals and
requirements of management.
In calculating, there are some ways to classify production costs on the basis of:
1.2.1. Classification of production costs on the basis of economic content and
nature of costs.
According to this classification, production costs in construction company are
futher divided into these components:
• Raw materials cost
• Tools and supplies cost
• Fuel and oil cost
• Labour cost
• Depreciation of fixed assets
• Render services–
• Other expenses in cash
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This classification shows the structure and percentage of each cost component. It
is the basis of making production costs statements following elements and the
plan of production costs for next period.
1.2.2. Classification of production costs on the basis of purpose and utility of costs
According to this classification, the same goal and utility costs are gathered in one
component, it does not distinguish economic content of costs. Production costs
include these categories as follows:

• Direct raw materials cost–
• Direct labour cost
• Equipment cost
• Overhead costs
This classification is useful for the company to communicate the data to evaluate
unit cost, analyze the implementation of planned unit cost and making production
costs estimation for next period.
1.2.3. Classification of production costs on the basis of method of aggregating
production costs:
Under this classification, production costs are divided into two categories:
• Unique costs can be traced directly to specific product.
• General costs are expenses that relating to many products. They are need to
separately aggregate to periodical allocate for costs center.
This classification helps the managers realize position of each costs in making
products to set up suitable method of aggregating production costs.
2. Unit cost of construction product and classification of unit cost:
2.1. Definition:
Unit cost includes all the production costs that a company has to pay to build a
finished construction.
Unit cost of construction product includes four components such as:
• Direct raw materials cost–
• Direct labour cost
• Using equipment cost
• Factory overhead costs
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2.2. Classification:
At first, in order to classify unit cost, accountants have to compute estimation of
cost of construction product.

Unit cost is a part of estimation cost that rounds up direct costs and indirect costs
following the finished volume of construction.
In accounting and management, unit cost of construction product can be classified
as follows:
2.2.1. Cost price of construction work:
Cost price of construction work includes all the production costs to finish volume
of construction following the estimate.
Or :
Cost price of construction work is formed and existed in a given time. It s’
evaluated in medium conditions of construction production, management
organization, materials and labour expenses ... for each kind of work or for a
specific work. Cost price of construction work is sequently stability.
2.2.2. Planned unit cost:
Planned unit cost is evaluated on the basis of specific conditions features of one
construction company in a given planned period.
Therefore, planned unit cost is an index that business try to reach in order to
achieve the profit level thanks to decreasing unit cost in planned period. It reflects
the standard of company s unit cost management.‘
dang thi lan anh accounting and auditing
5
Estimation
of cost
Cost to finish the estimation
volume of construction
Normed
profit
= +
Cost price of
construction work

Estimation
of cost
Normed
profit
-=
Cost price of
construction
work
=
Volume of works following
the economic and
technique norms are
determined by Goverment
x
Unit price is announced
by Government for each
construction area and
other normed costs
Planned
unit cost
=
Cost
price
-
Profit base on
decreasing unit cost
+(-)
Difference from
estimate
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2.2.3. Assessed unit cost:
Assessed unit cost is the total expenses that cost to end a volume of construction.
It is calculated on the basis of structural feature, method of building organization
and management following costs norms that achieved at the beginning of
construction.
Thus, assessed unit cost will changed following fluctuation method of
management and organization of construction or fluctuation structural feature. So,
it is recomputed to be suitable.
2.2.4. Actual unit cost:
Actual unit cost is the total costs incurred in construction process that is
aggregated by accountant.
The basic difference between actual unit cost with the above unit cost: Structure of
these above unit cost only include normed costs but actual unit cost includes all
costs incurred that means covering normed costs and extra costs.
In short, in order to determine accurately the quality of construction operation, it is
need to compare those unit costs.
• Comparing actual unit cost with planned unit cost shows the decreasing level
of planned unit cost.
• Comparing actual unit cost with estimation of unit cost reflects the
accumulation index to expect the company ability in next period.
• Comparing actual unit cost with assessed unit cost shows the finished norms
level of each specific volume of construction.
3. The relationship between production costs and unit cost.
Production costs and unit cost are two different terms of production process.
Production costs reflect the moneytary value that company cost in process and
unit cost reflects the results of production.
All the expenses create (on this period or transferred from previous period) and
precalculating costs that relate to volume of finished work will form the unit cost of
construction product.
Thus, production costs and unit cost have closed relationship. Production costs

are the base to evaluate unit cost of finished products. Saving or wasting of
production costs effect directly to increasing or decreasing of unit cost. Finally,
management of unit cost must be linked to production costs management.
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The scheme of relationship between production costs and unit cost:

4. The objects and method of aggregating production costs:
4.1. The objects of aggregating production costs in accounting:
The objects of aggregating production costs are defined as scale and scope of
costs which accountant has to aggregate to satisfy the requirements of checking
and supervising the costs in building process.
In order to accurately determine costs objective, accountant has to base on
features of production costs and the use of cost in production.
• The objects of aggregating production costs may be the whole technological
process or each specific stage fluctuation to production mechanism
organization, requirement and standard of economic management and
internal accounting requirements.
• Following production process, product characters, the requirement of
evaluating unit cost, the costs objective may be each group of products or
each kind of products, or each component or details group, detail of product.
In construction, product is specific so that the objects of aggregating production
costs may be the customer s order, each construction, part of building or group of’
buildings, as usual.
Aggregating production costs to adequate objects gives a good assistance to
production costs and manufacture administration, to internal and the whole
accounting of company. Besides, it helps timely and accurately evaluating unit
cost.
4.2. Aggregating production costs method:

4.2.1. Aggregating and allocating direct raw materials cost:
Direct raw materials costs are costs of major materials, semi finished product,–
auxiliary materials, fuel oil ... used directly in manufacturing products.
dang thi lan anh accounting and auditing
7
Costs in progress at the beginning Costs create in process
Total of unit cost of finished products Costs in process at the ending
Total of unit cost of
finished products
=
Costs in progress
at the beginning
+
Costs create
in progress
-
Costs in process
at the ending
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Direct raw materials costs are usually aggregated following direct method. It is
applied for direct raw materials costs that are only concerned in only one cost
objective.
If direct raw materials costs are concerned in many objects of aggregating
production costs, accountant has to use indirect method. That means accountant
has to determine the reasonable bases to allocate direct raw materials costs by
following formula:
To accurately aggregate direct raw materials costs, accountant has to pay
attention to checking and evaluating the received materials but not using up and
value of received spent materials to minus them out of direct raw materials costs.
According to Financial Regulation issued by Ministry of Finance, in order to

aggregate and allocate direct raw materials costs, account 621- Direct raw“
materials is used.”
Chart 01: Direct raw materials costs accounting
No ending balance exists in A/C 621
dang thi lan anh accounting and auditing
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Costs
allocate to
object i
=
Total costs to be allocated
General criterion of allocation of all objects
x
General
criterion of
allocation
of object i
Actual
direct raw
materials
costs
=
Raw materials
are used directly
for producing
process
-
The unused materials
distributed for
manufacturing are returned

and stored
-
Value of
received
spent
materials
A/C 152(611) A/C 621
A/C 152(611)
Raw materials are used
directly for producing process
The unused materials
distributed for manufacturing
are returned and stored
A/C 111,112,331
Raw materials are not stored
and used immediately for
producing products
A/C 154(631)
Transferring actual direct
raw materials costs
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4.2.2. Aggregating and allocating direct labour cost:
Direct labour costs are salaries payable to employees directly involved in
manufacturing. Salaries includes basic wages, allowances, not includes social
insurance (15%), trade union fees (2%), health insurance (2%).
Direct labour costs are usually computed directly to each relating costs objective. If
direct labour costs involve in many objects that are not calculated directly, they
could be general aggregated and allocated to costs objective by reasonable
bases, at the ending of accounting period.
The common allocation bases are used such as assessed salary (or planned),

assessed hours wage or actual hours wage, volume of products ... following the
concretely condition.
According to Financial Regulation issued by Ministry of Finance, in order to
aggregate and allocate direct labour costs, A/C 622- Direct labour costs is used.“ ”
It can be opened sub accounts depending on the features of operating activities.–
Chart 02 : Direct labour costs accounting
No ending balance in A/C 622
4.2.3. Aggregating and allocating factory overhead costs:
Factory overhead costs are general operating expenses supporting the process of
producing created at construction brigades such as expenses for factory
employees, the costs of tools, supplies utilised for factory, depreciation of fixed
assets, expenses for services rendered and expenses paid in cash. It also
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9
A/C 622 A/C154(631)A/C 334
Salaries and allowances
payable to direct employees
Transferring direct labour
costs to cost objects
A/C 335
Payable expenses for labour
costs on day leave’
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includes trade union fees, social insurance, health insurance deducted from wages
of direct labour, construction machinery operator and management staff.
Factory overhead costs are aggregated at each place. At the end of month,
aggregated overhead costs are transferred to evaluate unit cost.
Factory overhead costs of which brigades will be transferred to that brigade to
evaluate unit cost of its product. If one brigade produces many products in the
period, factory overhead costs will be allocated to each costs objective. Factory

overhead costs can be allocated on the basis of:
• Actual hours wage of worker.
• Direct materials costs.
• Direct materials and labour costs.
• Assessment of factory overhead costs.
It can be allocated according to the formula:

According to Financial Regulation issued by Ministry of Finance, in order to
aggregate and allocate factory overhead costs, A/C 627 Factory overhead– “
costs is used. Accountants may open some sub- account to record specific”
expenses for their own operations.
In addition, upon the Directive 89/2002/TT-BTC: Guidung accountants to practice
four Vietnamese accounting standards issued following Decision 149/2001/QD-
BTC dated December 31/2001 of Minister of Finance, Ministry of finance
supplements account 242 Long term prepaid cost . This account used to record– “ ”
expenses which relate to several fiscal periods and they therefore can not be
charged wholly to the current period but should be allocated to the periods in
which they relate.
dang thi lan anh accounting and auditing
10
Volume of factory
overhead costs are
allocated to each
cost objective
=
General criterion of allocation of all objects
General criterion of allocation of each object
x
Total factory
overhead

costs must
be allocated
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Chart 03 : Factory overhead costs accounting
No ending balance in A/C 627
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11
A/C 334,338 A/C 627 A/C 154(631)
Salaries , allowances payable
to factory employees and
social insurance , health
insurance , trade union fees for
worker , machinery operator
and factory employees
Allocating and transferring
fixed factory overhead costs
to each unit s fabricating cost‘
following normal capacity
A/C 152
A/C 632
Fixed factory overhead costs
are not allocated in case that
actual level of production is
less than normal capacity
Materials costs
A/C 153
Tools are used with low value
A/C 142,242
Tools with
high value

The first
allocation
A/C 111,141,331
Expenses rendered and
others in cash
A/C 241(3)
Depreciation of fixed assets
Increased depreciation level
because of fluctuation of
depreciation method or time
A/C 241(3)
Decreased depreciation
of intangible fixed assets
is different from a certain
amount that presets aside
because fluctuation of
time or method
A/C 241
Repairing and upgrading fixed
assets with short value that
not satisfied the condition of
recording increased cost
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4.2.4. Aggregating and allocating machinery cost:
Equipment costs includes two types:
• Temporary costs are one time incurred costs that relating to
assembling, removaling, carriage machines and others for temporary
constructions supporting for using equipment.
This kind of costs are allocated following the using time of temporary constructions
or construction period at building site (which is shorter will be choosed to be

allocation base). Calculating the monthly volume of allocation as follows:
Temporary costs are also calculated by preseting aside into equipment costs.
When ended using temporary constructions, the differences between actual
incurred cost with preset aside costs are recognized as regulations.
• Regular costs include daily incurred for using machines process such as: fuel ,
oil costs, other auxiliary materials costs, salaries of machinery operators,
depreciation of fixed assets, rendered machines costs. These expenses are
computed one time to equipment costs in period.
4.2.4.1. Company has organized separate equipment brigades with accounting
classifications. These brigades have their own accounting work.
a. If company practice by method of supply equipment services among internal
sections, the accounting chart as follows: (Chart 04)
dang thi lan anh accounting and auditing
12
Volume of
temporary
cost
monthly
allocation
=
Actual costs to
build temporary
constructions
+
Estimated disassembling
temporary construction
costs
-
Estimated
recoverable value of

spent materials
Using time of temporary constructions or
construction period at work camp
A/C 111,152 ... A/C621,622,627 A/C154 A/C 623
Aggregating
actual costs
Transferring costs to
evaluate unit cost
Allocating
equipment costs
to objects
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b. If company practice by method of purchase equipment services among internal
sections:
4.2.4.2. Company has not organized separate equipment brigade or organzied but
not graded them:
dang thi lan anh accounting and auditing
13
A/C 111,152 ,... A/C 621,622,627 A/C 154 A/C 632
Actual price of purchased
Machines shift
A/C 512
A/C 333(1)
A/C 623
A/C 133(1)
Purchased price Computing to equipment cost
Taxes payable to state budget Taxes deducted
A/C 334 A/C 623
A/C 214
A/C 152,153

A/C 111,112,331...
Salaries pay to workers
Depreciation of construction equipment
Materials, tools are used for construction machines
A/C 133(1)
Other expenses for construction machines
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* Equipment costs are allocated to reasonable construction objects basing on
volume of machines shift or actual served work.
• In case that using equipment cost are particularly accounted to each kind of
machines be allocated to each object :
• If company does not account specific to each kind of machine, accountants
have to evaluate standard machines shift through reduction factor:
4.2.5. Aggregating production costs accounting:
Production costs are needed to transfer in order to aggregate the whole operation
expenses and detailed in each object after particularly accounting for each
component such as: direct raw materials costs, direct labour costs, using
equipment costs, factory overhead costs.
Accountants depend on aggregating production costs by using perpetual inventory
method or periodical inventory method to use accounts.
dang thi lan anh accounting and auditing
14
Equipment
costs are
allocated
to each
object
=
Total equipment costs must be allocated
Total actual machines shift or

implementation volume of building
x
Volume of actual
machines shift or
volume of work
are served for
each object by
machine
H
=
Planned price of one machines shift
Planned price of lowest one machines shift
Standard
machines shift
of each
operated kind
=
Volume of actual
operated machines shift
of each machine
x
H
Equipment
costs are
allocated
to each
object
=
Total equipment costs must be allocated
Total reducted standard machines shift of all machines

x
Reducted
machines
shift serving
for each
object
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• If company applies perpetual inventory method, accountants use account 154
Work in progress to aggregate production costs.– “ ”
Chart 05.1 : Aggregating production costs
( Perpetual inventory method )
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15
A/C 621 A/C 154
A/C 622
A/C 627
A/C 623
Transferring direct raw
materials costs
Transferring direct labour costs
Transferring factory overhead costs
Transferring equipment costs
A/C 152
Unused raw materials are
returned and stored
A/C 138
Reiceivable reimburse
A/C 336(2)
Actual price of finished
construction products hand

over to main contractor
A/C 155)
Actual price of finished
construction products stored
A/C 632
Actual price of finished
construction products
hand over to customer
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• If company applies periodical inventory method, accountants use account 631
to aggregate production costs, account 154 is only used to reflect the value of
work in progress at the end of the period.
Chart 05.2: Aggregating production costs
(Periodical inventory method )
5. Estimation of work in progress:
Work in progress of construction company include construction are in building,
volume of work are not accepted to pay by contractor.
Accountants have to evaluate actual unit cost of finished product in accounting
period following formula:
In order to evaluate value of work in progress at the ending, we must estimate
exactly the volume of work in progress, determine the finished level and use the
reasonable to evaluate.
There are many ways to evaluate work in progress on the basis of handing over
method between contractor and construction brigades.
5.1. In case that handing over when construction is whole finished:
Under this case, the sum of production costs from the beginning of building to the
time of estimate are actual costs of work in progress.
dang thi lan anh accounting and auditing
16
A/C 631 A/C 154

Transferring the value of
work in progress at the
ending of the period
A/C 152,138
Scraps and other reiceivables
A/C 632
Total value of finished products
A/C 154
Transferring the value of work
in progress at the
beginning of the period
A/C 621,622,623,627
Transferring direct raw
materials costs , direct labour
costs , factory overhead costs ,
equipment costs
Actual unit
cost of
finished
product
=
Value of work
in progress at
the beginning
of the period
+
Production
costs arising
in accounting
period

-
Value of
work in
progress at
the ending
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It always applies for correction and finishing work, low value constructions
building, short construction period following the contract that are accepted to pay
when whole finishing by contractor.
5.2. In case that handing over as each finished stage:
Work in progress are unfinished construction stages. Evaluating costs of work in
progress at the ending of the accounting period by allocating actual costs. It is on
the basis of cost price and degree of finishing.

5.3. In case that handing over as periodical finished product of each work or
each structural part:
Calculating actual costs of volume of unfinished products at the ending by formula
as follows:
dang thi lan anh accounting and auditing
17
Cost price of work in progress
of eacs stage at the ending
=
Cost price of
each stage
x
Percentage finished of
each stage
Allocation
coefficient

actual
costs for
unfinished
stage
=
Costs of work in progress
at the beginning
Cost price of volume of finished
product handing over in period
+
Costs in the period
+
Total cost price of all stage
unfinished products
Actual costs of
work in
progress of
each stage
=
Cost price of
work in
progress at
the ending
x
Allocation
coefficient
Cost price of each
unfinished product
=
Volume of unfinished

products
x
Estimated
unit cost
x
Percentage
finished
Actual
costs of
volume of
unfinished
products
=
Costs of work in progress
at the beginning
+
Costs in the period
Cost price of volume of
finished product handing
over in the period
+
Total cost price of
volume of unfinished
products
x
Cost price of
unfinished
product at
the ending
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6. The objects and the method of evaluating unit cost.
6.1. The objects of evaluating unit cost:
The objects of evaluating unit cost are products, works which are manufactured by
enterprise.
In construction activity, because each product has its own estimation and design,
so the objects of evaluating construction unit cost are construction, or volume of
finished product.
* The objects of aggregating production costs are usually equal to the objects of
evaluating unit cost, in capital construction.
The costs objective are the constructions followed customer s order, and the’
objects of evaluating unit cost are finished products.
6.2. Evaluating unit cost period in capital construction:
Due to products of construction are manufactured following each order with long
cycle, construction is only finished when ending a production cycle, so evaluating
unit cost period usually choosed is the time of handing over finished constructions
to use.
Therefore, evaluating unit cost period may be not suitable with accounting period ,
it is suitable with production cycle.
6.3. The method of evaluating unit cost:
The method of evaluating unit cost is method of using aggregated production costs
data and other relating data to calculate total unit cost and unit cost of finished
product on the basis of determined objects.
In construction company, methods are usually applied such as follows:
6.3.1. Evaluating unit cost by simple method :
This method is applied in case that the objects of evaluating unit cost and costs
objective are the same, the evaluating unit cost period is suitable with accounting
period.
According to this method, unit cost is evaluated by formula:
dang thi lan anh accounting and auditing
18

Unit
cost
=
Costs of work in
progress at the
beginning
+
Production costs
incurred in the
period
-
Costs of work in
progress at the
ending
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6.3.2. Evaluating unit cost by grand total costs:
This method is applied in case that company builds high value constructions,
production costs are aggregated following each brigade and unit cost is evaluated
to each finished product.
Unit cost is evaluated by formula:

6.3.3. Estimating unit cost in comformity with customer’s order:
It is the popular method.
According to this method, costs objective and the objects of evaluating unit cost
are customer s orders. However, in order to satisfy the requirements of work and’
because they have their different own estimation so actual unit cost of each
construction is calculated by formula:
6.3.4. Evaluating unit cost by assessment method:
This method is applied when company had computed assessed unit cost of each
construction following each component of unit cost.

Accountants aggregate actual production costs by each component to compare
with assessed costs and to evaluate unit cost by formula:

dang thi lan anh accounting and auditing
19
Unit
cost
=
Costs of work
in progress at
the beginning
+
The sum of production
costs of brigades that
construct a building
-
Costs of work
in progress at
the ending
Actual unit
cost
=
Cost price of
construction
x
Total production costs aggregated in the period
Total cost price of constructions
Actual total
unit cost
=

Assessed total
unit cost
+(-)
Differences from
assessment
+(-)
Justified
differences
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6.3.5. Evaluating unit cost by coefficient and percentage method:
This method is applied when costs objective are group of same kind products or
the whole production process. Object of evaluating unit cost is each finished
product made by this process.
dang thi lan anh accounting and auditing
20
Unit cost of
standard product
=
Total unit cost of all kind of products
Total of reducted standard product
Unit cost of each
kind of product
=
Unit cost of
standard product
x
Reduction factor
of each kind
Total of reducted
standard product

=
The sum of
Volume of
product i
x
Reduction factor
of product i
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Chapter II
Accounting practices on aggregating production costs
And evaluating unit cost in Huong Giang construction company.
In this section, we are going to look at the following issues related to the Huong
Giang company:
• Foundation history.
• Production and management organization.
• Accounting work and accounting mechanism organization.
1. Production and business management organization:
1.1. Foundation history of Huong Giang construction company:
Huong Giang construction company Ministry of National Defense was–
established under the decision 501/QD-QP dated 18/04/1996 by the Minister of
National Defense, on the basis of incorporation of two enterprises: Construction
enterprise 17/5 and Coal exploit enterprises 30/4.The headquarter of company is
located at A7, Tan Mai Hai Ba Trung Ha Noi.– –
Huong Giang company is a State owned enterprise. It has a number of capital as
follows: 7.315.116.041 VND .
It devides into: - Fixed capital : 5.323.330.443 VND .
- Current capital : 1.991.785.598 VND .
And includes:
- Amounts granted by the Ministry of National Defense : 2.069.076.220 VND.
- Amounts granted by the National budget : 1.200.000.000 VND .

- Amounts undistributed earnings : 950.423.721 VND .
Over the past years, company has tried its best to complete the duties. Company
has achieved high production results, increase business surplus and step by step
expand its capital. At present, the company s market is all over the nationwide. ’
The company s growth and development in recent years are presented in following’
table:
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Website: Email : Tel (: 0918.775.368
Some indexes reflect practices for producing and business of company.
Index Unit Year 2000 Year 2001
1. Gross product
VND 35.678.000.000 37.360.000.000
2. Revenue
VND 26.818.432.331 33.856.604.557
3. Distribution in State budget
VND 1.729.453.340 2.308.766.381
4. Employees
Person 524 554
5. Salary per person
VND 790.000 916.000

1.2. Production and management organization:
1.2.1. Feature of technology production process:
The major products of Huong Giang construction company are constructions,
construction items such as: civil works, industrial buildings, water communication
works, bridgeworks... The construction scale is not the same, products are
specific, and long constructional duration. Besides, the construction procedures of
company are taken at different places and they are delivered to the location of
products.

Because of the feature of construction capital, so the company s brigades are’
independent and distributed to many provinces and cities in all over the country. It
effect directly to the company s production management work. Next to the’
influence of construction product characters, it also is effected by technology
production process. Construction practices of company may be devided into six
stages as follows:
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Building bidding
Website: Email : Tel (: 0918.775.368
1.2.2. Production and business machanism organization:
At present, Huong Giang company has twelve construction brigades, they are
under the controlling of company. Management mechanism of company is
organized in accordance withf join - direct line function model.
• Director Board:
o The head of the company is the general director. He is responsible for all the
company operation.
o Vice director is responsible for construction, technical control construction–
practices, controlling production plan.
• Organization and Administration division:
This division is in charge of labour selection, labour organization for brigades.
Besides, it is also responsible for adminitrative work, establish the labour
documents and the standard of salaries, allowances.
• Technical planning division:–
This division is in charge of technical management in construction, in detailed as
follows:
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Making construction estimate
Building

Handing over finished works
Making balance sheet of finished works
Contract closing
Raw
materials,
labour,
machines
Website: Email : Tel (: 0918.775.368
o They make the construction schedule, the estimate, technical supervison
when the company bids a construction. And they have to be responsible for
constructional work quality.
o Managing tools and making bills of price of tools.
• Accounting and Financial division:
This division is responsible for recording, analyzing and communicating the
accounting information to Director Board in making economical decisions.
• Materials and machines division:
This division is in charge of ensuring materials, machines, equipment for the
construction requirements of each brigades.
• Building brigades:
The main duties of construction brigades are construction, assuring the schedule
and quality of works.
1.3. Accounting mechanism organization:
In order to meet the production and business features and make full advantages of
ability accountants, the accounting apparatus is organized to follow model of both
concentration and division.
• Statistic accountants at construction brigades: They specialize in orginal
counting, treating and checking accounting vouches and then periodical
sending them to Accounting division of company.
• Company s accountants make records of transactions performed by company’
and brigades, sums up statements of brigades to make the company s– ’

general statements of account.
At present, each accountants is responsible for his / her task:
o Chief accountant is responsible for the whole work of accounting, economic–
information and system of the company. He is also an assistant to the director
in the business activities and responsible for all of the accounting
organizations in the company.
o Accountant of general works and fixed assets is responsible for aggregating
the whole operation costs, recording the movement of fixed assets and make
its allocation table, open the detailed books and making statements to
company s regulations.’
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Website: Email : Tel (: 0918.775.368
o Accountant of banking and materials is responsible for recording transactions
of materials movement and the balance, the movement of cash in banks.
Besides, he is also in charge of opening Book for recording materials and“ ”
making the statements determined by Bank.
o Accountant of salary and insurance is responsible for calculating bonuses,
social insurance, health insurance and payable to the employee.
o Cashier is in charge of paying cash and making daily cash balance table as
well as keeping cash fund of company.
Chart of accounting mechanism organization at Huong Giang company.
1.4. Accounting policy applied in company:
1.4.1. Accounting work:
At present, company uses system of account for enterprises issued under the“ ”
decision No.1141 TC/CDKT dated October 1
st
1995 of Minister of Finance.
Accounting method on inventories is perpetual method.
1.4.2 . The accounting book system:

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Chief accountant
Accountant
of general
works and
fixed
assets
Accountant
of banking
and
materials
Accountant
of salary
and
insurance
Cashier
Accountants of construction brigades